Nigeria opens Kano gas facilities as CNG rollout strains refuelling network

Nigeria commissioned three gas facilities across two sites in Kano State on November 10, extending a compressed natural gas (CNG) rollout that has accelerated since the government removed petrol subsidies in 2023. Limited refuelling capacity, conversion costs and uneven access to gas continue to constrain adoption.

Rolling Energy Limited developed the facilities with support from the Midstream and Downstream Gas Infrastructure Fund (MDGIF). The Tamburawa site comprises a distribution hub rated at 300,000 standard cubic metres per day and a separate retail station. The Hotoro site has a daughter and retail station rated at 21,000 standard cubic metres per day. The Tamburawa hub can supply daughter stations, so the site ratings describe different points in the distribution chain.

Rapid expansion since subsidy removal

Kano is the latest addition to a national CNG network that President Bola Tinubu’s government is promoting as an alternative to petrol, particularly for commercial vehicles and other high-mileage users.

The policy accelerated after Tinubu ended Nigeria’s longstanding petrol subsidy when he took office in May 2023. In August that year, the presidency approved the Presidential Compressed Natural Gas Initiative, initially targeting more than 11,500 new CNG-enabled vehicles and 55,000 conversion kits for existing petrol-powered vehicles.

At a national CNG summit in early November, Pi-CNG reported more than 143,000 vehicle conversions by the end of the third quarter. Officials also put the number of conversion centres at 430 and the refuelling station count at 105.

The initiative’s website lists 105 refuelling stations, more than 140,000 conversions and more than 400 conversion centres. In March, Tinubu expanded its mandate to include electric vehicles and directed it to accelerate mobile CNG refuelling while permanent infrastructure expanded.

At a station opening in Abuja on November 6, Pi-CNG Executive Chairman Ismaeel Ahmed put the number of operational refuelling stations at about 106, with another 170 under development or awaiting licences, Nairametrics reported.

Queues and limited capacity

Motorists have reported lengthy queues at existing stations. Lagos State aims to expand its network to 19 stations by the first quarter of 2027 and 29 by the first quarter of 2028. Tayo Gbajumo, managing director of state-owned Ibile Oil and Gas Corporation, said inadequate infrastructure was contributing to queues.

The constraint goes further upstream than the filling station. Omid Hamidkhani, an alternative-fuels development consultant, told Nairametrics in September that Nigeria’s CNG challenge extends across the gas supply chain. He said trucking CNG from mother to daughter stations can bridge gaps in pipeline coverage, although longer distances raise logistics costs and operating risks. He argued for a mix of pipelines where commercially viable, trucked CNG and liquefied natural gas (LNG), which can be more practical to transport over longer distances because of its higher energy density.

At Tamburawa, the hub can receive LNG by road, store it and turn it back into gas before compressing it for vehicles or supplying smaller stations. Rolling Energy founder and chief executive Mubarak Danbatta cited Ajaokuta and Obajana in Kogi State as examples of distant supply points that some Abuja businesses had relied on. He said the Kano hub would bring supply closer to customers and could support new stations in Kano, Jigawa and Zaria.

These road-based distribution systems can extend gas supply ahead of pipeline connections. Their economics depend on distance, road logistics, storage, compression and reliable gas supply.

Investment along the gas chain

MDGIF said in September that NGN671bn (about $505mn) in public capital had helped attract NGN1.6tn in private investment. Its portfolio covered 31 projects and 205 infrastructure assets. In an October update, the fund said 127 assets were at various stages of execution and 10 had been commissioned.

The portfolio included 15 CNG mother stations and 86 daughter stations, Nairametrics reported, alongside gas-processing, LNG and flare-gas projects.

The financing requirement extends beyond CNG. bne IntelliNews reported in October that the Nigerian Midstream and Downstream Petroleum Regulatory Authority estimated that the wider oil and gas sector would require $30bn–$50bn of fresh investment through 2030, including capital for gas processing and supporting infrastructure.

The regulator also revised Nigeria’s gas transportation network code in October to improve access to shared pipeline capacity. The changes matter for CNG because adding forecourts depends on processing and transport infrastructure being able to deliver enough gas to them.

The Nigerian Upstream Petroleum Regulatory Commission put the country’s proved and probable gas reserves at 215.19 trillion cubic feet as of January 1, 2026, comprising 100.21 trillion cubic feet of associated gas and 114.98 trillion cubic feet of non-associated gas. Turning those reserves into commercially available fuel requires production, processing and transport under contracts and pricing structures that can support investment.

The calculation for drivers

Vehicle owners face a similar calculation. At the November summit, Pi-CNG chief operating officer Tosin Coker put the cost of a conversion under the government-certified programme at NGN300,000–350,000 for a tricycle and NGN450,000–500,000 for a standard four-cylinder saloon. Actual costs vary with cylinder type and vehicle requirements.

Tinubu has directed Pi-CNG to work with CreditCorp Nigeria and financial institutions on financing to make conversions more affordable. High-mileage vehicles have more scope to recover the upfront cost through fuel savings, but commercial drivers also have to factor in the distance to a station and time lost in queues.

In September, Tinubu cited routes in Borno, Oyo, Adamawa, Enugu, Plateau, Abuja and Niger where CNG or electric transport programmes charged lower fares than conventional services. The presidency’s examples covered selected routes.

At the November 10 commissioning, Minister of State for Petroleum Resources (Gas) Ekperikpe Ekpo warned of sanctions against marketers he accused of exploiting customers through high CNG prices. He also criticised transport operators that had benefited from the government programme but continued to charge fares comparable with those of petrol-powered vehicles.

Ahmed said the initiative had attracted about $2.6bn in private investment. Pi-CNG’s website gives a figure of more than $2.5bn. The disclosures give no project-by-project breakdown of capital deployed, projects under construction or future commitments.

MDGIF Executive Director Oluwole Adama said the Tamburawa station could serve about 2,500 vehicles and 500 trucks a day and the Hotoro station about 200 vehicles and 50 trucks. Those are capacity estimates. For drivers weighing a conversion, the practical questions are how reliably they can refuel and how much they can save after paying for the conversion and allowing for time at the pump.